A once-dismissed antitrust lawsuit brought in 2015 by a collection of NFL Sunday Ticket subscribers against the NFL and DirecTV—the subscribers claim they were effectively ripped off—could soon become a class action case.
On Aug. 19, attorneys for the plaintiffs petitioned the presiding judge, Philip Gutierrez of Los Angeles’ federal district court, to certify two classes. One would include residential subscribers to DirecTV who bought the Sunday Ticket after June 17, 2011; the other would cover commercial subscribers during the same period.
This is significant because the larger the class, the more threatening the case. Potential damages climb as the number of class members increase. Also, damages can be trebled under antitrust law, which further highlights the potentially threatening nature of the case.
The federal rules of civil procedure make class certification a multifaceted process: Judge Gutierrez will only certify the proposed classes if he finds, among other factors, there are questions of law or fact common to the classes and the accompanying claims are representative. A hearing on class certification is scheduled for Dec. 16.
Though the case has been in litigation since the mid-2010s, it could remain on the docket well into the 2020s, barring a settlement. A jury trial is currently scheduled for Feb. 22, 2024, but any verdict would be subject to appeal.
The most serious part of the plaintiffs’ argument is that the NFL’s Sunday Ticket package, offered by DirecTV, violates antitrust law by preventing individual NFL teams from competing with one another in the sale of broadcasting rights to markets where out-of-town fans reside. If a fan wants to watch a team that is not in the market where they reside, they must buy Sunday Ticket, which bundles games into one package but at a hefty price–$293.94 per season. Meanwhile, local fans can normally watch games on free TV channels.
In a more competitive market, the Sunday Ticket plaintiffs insist, NFL teams would bid to have broadcasts outside of their primary markets. The Dallas Cowboys, for example, might have large enough fan bases in Houston, New Orleans or New York to profitably distribute Cowboys telecasts there.
The Texans, Saints, Giants and Jets might not welcome the viewing competition, but local consumers would arguably be better off since they would have more games to watch without having to spend a huge amount of money to buy Sunday Ticket. More NFL game broadcasts would also create new opportunities for companies to advertise their goods and services during game broadcasts.
But NFL teams contractually agree to not poach other teams’ home territories, which under NFL bylaws refer to “the city in which [a team] is located and for which it holds a franchise and plays its home games and includes the surrounding territory to the extent of 75 miles in every direction from the exterior corporate limits of such city.”
The bylaws make concessions for certain teams, such as stipulating that the Green Bay Packers’ home territory includes all of Milwaukee County. But one stipulation is clear: “No television station,” the bylaws note, “may carry or broadcast the game if its signal is visible in the home territory of the home club in the city where the game is being played.”
After a nearly three-decade broadcast partnership, the NFL’s Sunday Ticket deal with DirecTV will conclude at the end of this upcoming season. Last week, Amazon announced a multiyear deal with DirecTV to show Thursday Night Football games in over 300,000 bars, restaurants and other non-residential locations. That arrangement, however, remains outside the scope of the current litigation.
In 2019, the U.S. Court of Appeals for the Ninth Circuit reversed a trial court dismissal of the case, which seeks both monetary damages and an injunction that would compel team competition in the sale of broadcasting rights. Judge Sandra Segal Ikuta drew from another sports broadcasting case, NCAA v. Board of Regents, to identify the problematic features of the Sunday Ticket.
In Board of Regents, the Supreme Court held the NCAA had violated antitrust law by capping the number of broadcasts each college football team could distribute. Those caps interfered with individual schools’ autonomy to negotiate broadcasting deals that would expand viewing options for fans. Analogously, Judge Ikuta explained, the NFL blocking teams from selling their telecast rights independently interferes with individual teams’ autonomy and denies fans more viewing options.
The NFL and DirecTV have insisted their arrangements withstand antitrust scrutiny. As the league tells it, fans haven’t been denied opportunities to watch games. Instead, they argue just the opposite—NFL broadcasting deals supply ways for fans to watch any game no matter the time and no matter the location in the U.S.
To that point, if NFL teams were denied the chance to pool their broadcasts, some NFL teams might not offer games out of town, or if they do, not in as many out-of-town markets as are currently served by Sunday Ticket. Alternatively, fans might have to pay more to watch those out-of-town games. The larger point is the marketplace is not necessarily better for consumers if the NFL and DirecTV lose.
After a relative lull in activity, a recent flurry of court filings—many of which remain sealed under a protective order—have accompanied both the class certification petition and the declarations of the plaintiffs’ experts in the case.
One of the unredacted declarations filed this month was a market research report from Sarah Butler, managing director of the San Francisco-based NERA Economic Consulting, who conducted a study of 975 consumers who watch NFL games.
According to Butler’s focus group, which included both Sunday Ticket subscribers and non-subscribers, there was a strong consumer preference for having access to individual NFL games, instead of having to pay for a package that includes many games they aren’t interested in.
“These data also demonstrate,” Butler wrote, “that consumers who are not current DirecTV subscribers would generally be unwilling to switch to DirecTV [in order] to access their preferred NFL content.”
Earlier this summer, the plaintiffs’ attorneys—led by the Los Angeles office of the law firm, Susman Godfrey—conducted depositions with several of the NFL’s most powerful figures, including New England Patriots owner Robert Kraft, the longtime chair of the league’s media committee, and commissioner Roger Goodell.
In Goodell’s deposition, which took place on June 16 in New York, the commissioner was asked by opposing counsel about his educational and professional background.
“You never studied law,” queried the attorney, according to a heavily redacted copy of the transcript.
“Nope,” Goodell said, “and proud of it.”